ChrisP5 (Missouri)
Posts: 165
Posts: 165
Posted:
11 months ago our board voted to open a CD with different bank than where we keep our savings and operating accounts. Our management company processed the paperwork and cut a check and mailed it to the bank to open the CD. The CD showed up on our financial statements as an asset and the check showed up on our check register. Our auditor discovered that the check was never cashed and the CD was never opened. The funds never left our operating account. Ultimately this cost us about $500 in interest that would have been earned.
Our management company has acknowledged the error in their internal processes and indicates it has been resolved. The person reconciling bank accounts apparently never bothered to report up the chain of command such a large check was still outstanding. Our treasurer didn't review the bank statements and compare them to the check register to notice an unusually large balance in our operating account vs. the check register that we receive with our monthly financials. I occasionally noticed that no interest had been recorded to the CD balance but failed to question it during board meetings. Needless to say the ball was dropped on several fronts on this matter.
Our MC has agreed to reimburse the association the interest lost which is great. Our financial state has improved from just having a few thousand dollars in the bank at any given time to a well funded reserve that requires us to utilize more than 1 bank to stay under FDIC coverage limits. Other than increased oversight from our treasurer and board any other thoughts on this matter and future steps to move forward particularly as we continue to grow our reserves? If we fully fund our reserve study we will ultimately need a relationship with quite a few banks before some very large expenses cause us to spend the vast majority of our reserves.
Our management company has acknowledged the error in their internal processes and indicates it has been resolved. The person reconciling bank accounts apparently never bothered to report up the chain of command such a large check was still outstanding. Our treasurer didn't review the bank statements and compare them to the check register to notice an unusually large balance in our operating account vs. the check register that we receive with our monthly financials. I occasionally noticed that no interest had been recorded to the CD balance but failed to question it during board meetings. Needless to say the ball was dropped on several fronts on this matter.
Our MC has agreed to reimburse the association the interest lost which is great. Our financial state has improved from just having a few thousand dollars in the bank at any given time to a well funded reserve that requires us to utilize more than 1 bank to stay under FDIC coverage limits. Other than increased oversight from our treasurer and board any other thoughts on this matter and future steps to move forward particularly as we continue to grow our reserves? If we fully fund our reserve study we will ultimately need a relationship with quite a few banks before some very large expenses cause us to spend the vast majority of our reserves.